The Securities and Exchange Commission (SEC) reported that the Philippines has made significant progress and is moving closer to exiting the Financial Action Task Force (FATF) gray list.
During the FATF plenary meeting held in Singapore from June 23 to 28, the global money laundering and terrorist financing watchdog acknowledged the substantial progress made by the Philippines.
These include demonstrating an increase in money laundering (ML) investigations and prosecutions in line with risk; enforcing beneficial ownership transparency obligations and ensuring law enforcement access to beneficial ownership data records; and implementing risk-based supervision of designated non-financial businesses and professions (DNFBPs).
The SEC has been one of the key contributors to these significant milestones.
In 2019 and 2020, the SEC mandated the declaration of beneficial ownership in the general information sheets (GIS) of domestic and foreign corporations and made the same available to competent authorities of law enforcement among which includes the Philippine National Police, the Bureau of Internal Revenue, the Philippine Drug Enforcement Agency, and the National Bureau of Investigation.
In 2021, it prohibited the issuance and sale of bearer shares and bearer share warrants through SEC Memorandum Circular No. 1, Series of 2021. These measures were crucial in promoting transparency and curbing the misuse of corporations for illicit activities.
To support the ease of doing business, the SEC initiated an amnesty program in 2023 to enhance compliance with reportorial requirements.
Over 85,000 corporations participated in the program, allowing them to rectify any delinquencies and waive past penalties while fulfilling only a single fee requirement.
Following the extended amnesty period until 2023, the SEC imposed severe penalties on non-compliant entities, suspending over 117,000 corporations to ensure adherence to transparency requirements.
The SEC efforts has seen its compliance rate go up from around 30 percent to nearly 70 percent in two years.
"The SEC remains dedicated to sustaining the gains made in beneficial ownership transparency and compliance,” said SEC Chairperson Emilio B. Aquino, who attended the 2024 FATF Plenary.
He added that “the recognition of these significant milestones by FATF underscores the SEC’s commitment to being a reliable partner in the global fight against money laundering and terrorism financing. It also demonstrates our full support for the government’s effort to get out of the FATF grey list."
During the FATF plenary, the Philippine government, represented by Executive Secretary Lucas P. Bersamin, reaffirmed its commitment to continuing its efforts to combat money laundering, terrorism financing, and proliferation financing of weapons of mass destruction.
On Jan. 2, President Ferdinand R. Marcos Jr. directed all government agencies to address the remaining action items and mandated a comprehensive, whole-of-government approach with a high-level commitment to improving the AML/CFT regime.